We have been surprised over the last year as we’ve spoken to many intelligent founders and discovered that more often than not, the answer to the question “who owns the IP?” was either “not sure” or “probably [insert other person here]”.

One person I spoke to had worked for 3 years for a startup. They were promised equity the whole time and in the end never received it. The reason the controlling founder gave was that it would have created a tax burden if they issued the shares. This is true, but it is far cheaper to do that early on in the company. The longer you wait, the more value the shares have and the higher the tax bill. And now the IP from 3 years of hard work is controlled by someone else, with no potential to re-purpose it or sell it by the person who made it come to life.

So if you are due equity, make sure it is issued sooner rather than later. If you don’t want to take on the tax penalty now, keep in mind it is unlikely to get better in the future.

Go forth and make IP, but be sure you get your stake!